Is ‘referencing’ a remedy to hypothetical bias in value of time elicitation? Evidence from economic experiments

This paper demonstrates that commonly used methods for eliciting value of time can give downward bias and investigates whether this can be reversed by ‘referencing’ as has been suggested (e.g., by Hensher in Transp Res B 44:735–752, 2010), i.e. with attributes of choice alternatives pivoted around a recently made journey. Value-of-time choice experiments were conducted in two rounds. In the first round, real and hypothetical purchases of performance of a simple time-consuming task were done to assess hypothetical bias; in the second round, participants were asked to do hypothetical travel choices with and without ‘referencing’ to a specific occasion, to be able to test ‘referencing’ as a remedy to the bias confirmed in the first round. A negative hypothetical bias was found for allocation of time at another occasion than the present (but not for a decision concern allocation of time ‘here and now’). A striking result was held from the second round experiments: ‘referencing’ indeed affects responses, but by reducing the elicited implicit value of time, so any negative hypothetical bias that would exist without ‘referencing’ would have been further magnified by the ‘referencing’ design.